January 1, 2004 News Media Release

Austin Energy Fuel Charge Increased, Still Among Lowest in State

Austin Energy has implemented a three-step increase in its fuel charge. The increases were the first in almost two years. They were necessary due to higher natural gas prices that have doubled from a year ago and due to unexpected outages of generating units. Unit outages have required Austin Energy to purchase additional power.

Fuel is a separate charge on electric bills. It is a dollar-for-dollar collection for the fuel needed to generate the electricity a customer used. Austin Energy's base electric rates will not change and have not increased since 1994.

To soften the impact of the additional fuel costs and to collect as much of the additional cost as possible during winter months when electric usage is lower-- the necessary fuel charge increase was implemented in three steps:

Step one: July 1, 2003

For electric bills received beginning July 1, 2003, the fuel charge increased from 1.774 cents/kilowatt-hour (kWh) to 2.004 cents per kWh.

Step two: November 1, 2003

For electric bills received beginning November 1, 2003, the fuel charge increased from 2.004 cents per kWh to 2.265 cents per kWh.

Step three: January 1, 2004

For electric bills received beginning January 1, 2004, the fuel charge increased from 2.265 cents per kWh to 2.796 cents per kWh.

All three steps together increase the average monthly utility bill (1,000 kWh) by $10.22 cents.

Key Factors
	Natural gas prices during 2003 were almost doubled from a year earlier.
	Unanticipated outages during 2003 of generating units at the South Texas Project and Fayette Power Project requiring Austin Energy to purchase replacement power. Austin Energy owns a portion of both plants.

Fuel Charge Still Among Lowest
Even after this three-step increase Austin Energy’s fuel charge is still among the lowest in the State.

As a point of information here are the average fuel charges of the Investor Owned Utilities (IOUs):

It should be noted that customers who subscribe 100% to GreenChoice^®, Austin Energy's Renewable Energy Program, are not impacted by this fuel charge increase. They are paying a green power charge rather than a fuel charge on that portion of their usage subscribed to green power. The green power charge remains fixed for the term of our renewable energy contracts. This is one of the attractive features of our green power program - a fixed cost over a multi-year period.

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For more information, contact Ed Clark, Public Information.
Phone: (512) 322-6514
Pager: (512) 802-2000